Three months after receiving a green light from the High Court of Singapore to probe into Three Arrows Capital (3ACS) assets, liquidators seized $35.6 million from the collapsed crypto hedge fund’s bank accounts.
The sum of money seized by Teneo, the New York liquidation firm appointed by a British Virgin Islands court, is the highest amount of cash to be taken since 3AC collapsed in July, leaving a $3.5 billion debt in its aftermath.
The liquidators have also recouped $2.8 million from forced redemptions of investments, not forgetting an unknown number of crypto and non-fungible tokens (NFTs), according to a presentation in a court hearing on Friday.
However, it has been a cumbersome task for liquidators to trace and protect the remaining 3AC assets so they can be returned to investors since the hedge fund founders, Kyle Davis and Su Zhu, have yet to make matters simpler, Teneo stated. He added that each founder has been uncooperative since last summer.
Kyle Davies denied the allegations claiming that the liquidators have refused to engage them directly. He shared some of his remarks via a Twitter post, saying,
“Unfortunately, our liquidators seem to refuse to engage us constructively. After months, cash in bank accounts, minimal asset sales, there has still been no disbursement to creditors.”
After a long silence on media platforms, Su and Davies have commenced posting on Twitter and talking to various media outlets, making liquidators frustrated after claiming that they have had limited communication with the founders of 3AC and their lawyers, according to the hearing presentation.
Founders Of 3AC Fail To Engage
On July 6, five days after 3AC filed for bankruptcy, Su and Davies appeared on an introductory zoom call with the hedge fund’s lawyers. However, they kept their cameras and microphones off and did not respond to direct inquiries.
Since then, Teneo has asserted that it has only had one call with each of the founders, each instance taking place in August, and Su and Davies’s attorneys still need to provide a complete set of financial documents.
The founders of 3AC claim to be in Dubai and Bali, where the liquidators have noted that both places are in” jurisdictions known for difficulties in enforcing foreign court orders.” Liquidators have also stated that Su and Davies engaged security experts, among other things, to establish secure communications between designated individuals that could be deleted starting mid -June 2022. They also added that the investment manager of 3AC needs to be more responsive.
According to the documents released Friday, when liquidators gained access to the fund’s office in Singapore,” most physical copies, servers, and hard drives had been removed.” Nonetheless, liquidators have disputed the claims that all necessary information had been supplied, including historical asset data and logins to 3AC brokerage and trading accounts.
In the presentation, liquidators also addressed the status of the $50 million, 500-ton superyacht identified as the Much Wow, purchased by 3AC founders before their firm’s downfall. The liquidators stated that Su and Davies made payments for the yacht directly from the debtor’s funds. However, the contract to purchase Much Wow was terminated by the ship’s builder Sanlorenzo, when the firm failed to pay the final amount owed.
Sanlorenzo is holding the proceeds from the sale of Much Wow and will channel the money to a holding company known as Much Wow Ltd., where the debtors have filed an interim claim for $30 million in the Cayman Islands.
Liquidators have also noted Su and Davies’ return to the public, with much of their attention seemingly diverted to the demise of Bahama-based crypto exchange FTX. However, on Friday, the liquidators stated that Su and Davies’ “calls for truth should be heard”- no doubt a reference to the 3AC case as much as to FTX.
